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Fair and Accurate Credit Transactions ACT of 2003
The Fair and Accurate Credit Transactions ACT of 2003 was passed to help fight identity theft. This Act gives consumers more tools to fight identity theft. For example, it gives consumers the right to receive one free annual copy of their credit report. It also gives consumers who have been a victim of identity theft the right to contact the three major credit bureaus and place a fraud alert on their credit report.
Section 315 of the Fair and Accurate Credit Transactions ACT of 2003 is relevant to merchant account applications. Section 315 is referred to as the “Red Flag Rule” and requires credit issuers to take steps to detect and prevent identity theft. Enforcement of Section 315 was delayed until May 1, 2009. Of course any credit issuer will naturally want to take steps to prevent identity theft. But as of this year it is also now being enforced as law.
The bottom line is that from this point forward consumers can expect credit issuers to take stricter measures to verify identity. And this is for the good of everyone. I am always happy to provide my identification when making a purchase or applying for credit. It gives me peace of mind knowing that the creditor is taking proper steps to prevent my identity from being stolen.
More to follow on this topic in my next blog.